Identity Theft: How 2012 Affects What You Should Do in 2014

In 2012, identity theft cost U.S. citizens more than $24 billion. The Bureau of Justice Statistics reports losses affecting 16.6 million people. In the vein of government-related identity crimes, fraudulent tax returns and falsified filings of government benefit papers top the list of reported incidents. According to the Internal Revenue Service (IRS), document-related theft accounts for more than 600,000 taxpayer victims per year. Resolving a false tax claim is difficult, time-consuming and a personal battle that will drain your health.

Now is the time to prepare your 2014 defenses and resources.

Insufficient Help and a Jagged Pathway

Although fully aware of tax-related identity theft, the IRS has only recently begun to improve the cluttered path to resolution. Prior to 2013, you bore the responsibility for initiating and promoting action against the theft. Victims were forced to substantiate their identity multiple times and to multiple departments. Within the internal offices of the IRS, inconsistent and conflicting identity theft guidelines were dispersed among 38 unique sections of the procedures manual. Resolution typically took a year or more.

As recorded in the 2012 BJS “Victims of Identity Theft” report, unauthorized use of an existing account comprised 85 percent of the reported identity theft complaints. Fraudulent use of bank accounts and credit cards accounted for 7.7 million thefts. Misuse of telephone, insurance and online services involved an additional 1.7 million victims.

However, for the victims of fraudulent tax returns, the financial headaches, emotional strain and repetitious struggle to reclaim their identity remain the same.

The IRS report on “Identity Theft and Tax Fraud” claims incidents of fraudulent tax returns is on the increase. Current agency predictions include a five-year loss of approximately $26 billion due to identity theft. The benefits offered via jobs at LifeLock.com reflect the growing demand for identity theft management experts. The complexity of IRS management simplifies the capacity for thefts to submit identity-related fraudulent tax returns. According to LifeLock, tax fraud has increased by 11.4 percent over the last two years. Although the IRS is finally waking up to the dangers, the demand for advanced recovery techniques must march forward at a speed that surpasses the quickness of the thefts.

Here’s How You Can Help Protect Yourself

If you are a previous victim of tax-related fraud or if you are a current victim:

Keep tabs on your credit report.

Learn and practice proven Internet safety habits.

Contact the IRS to ensure that your tax number is recorded in the new identity theft indicator project.